Updates

We met with our contractor on Friday to start the architectural plans, and throw in our ideas. Everything from the paint color, stone and tile down to the last electrical socket. We had to tell them exactly what we wanted. Once the new drawings come in, I'll post them. Our projected buildout for 2700 sq.ft. will be an astounding $97,000.

I received September's $5000.00 check for rent today.

I also negotiated a deal 2 weeks ago by searching in the local optometric newsletter for used equipment. I have purchased a used Topcon KR-8800 autorefractor, Marco 101 manual lensometer, Topcon AIT-350W equipment table, and Brewer stool for $6600. The doctor appeared to be 'closing out' her practice and the equipment was all new and purchased in 2006. I figure it's all worth roughly $15,000 new. I'll be picking it up within the next month and leave it in climate-controlled storage until July when we're ready for it.

In the meantime, here is a basic optical glossary for those looking to have an edging lab. I should've paid more attention in optics lab, but simply put, your optical is a money maker if you know what you're doing. Having a great optician will make or break that 'department' and I will post as much as I know. It's 11:42, I should crash now..

• Semi-Finished: doesn't have power ground in yet. No good to you if all you are using is an edger!!
  
• Stock Finished: a manufacturer has created a ready-made lens with the power in it (good to go in an edger)
  
• Finished Uncut: a full service lab has surfaced lens with power in it, can customize it
  
• Finished: edged and put into frame

Optical supplies

I'm trying to keep a running tally of how much everything will cost in each 'department' of the practice. Here is my current list for what the optical will need:

1. Pupilometer
2. Job Trays
3. Hot Air Frame Warmer
4. Tool Rack
5. Quick Fix Pro/Smart System Pro (nosepads, screws, etc) for repairs
   
6. Optical Tags (from ArchCrown) to label frame prices
7. PAL Identifier
   
8. ErgoPro plier kit
   

This is far from comprehensive, so I'll keep adding to it.

Accountants

Well I promised a while ago that I would post my accountants fees. Here they are for you to dissect:

Individual Tax Return - $225-375
LLC Return - $350-425
Sales Tax - $50/quarter
Quickbooks Initial Setup - $300 estimated
Quickbooks Support - $50/hour. Mid year trip and year end trip for 2-3 hours, each.

So, I can estimate to spend about $800-1200 yearly on accounting.

Vendors

Perhaps the most important aspect of your office, is what you'll be equipping it with. This is what enables you to see patients. Rightly so, we have decided to invest in high quality equipment and start with one lane.

If I can find these pieces used (or their equivalents).. then I'll get that instead of purchasing new. Grand Total: $97,000

1. Exam Lane: Marco Deluxe Stand, Marco 1280 Encore Exam Chair, Marco G2 Slit Lamp ($10,500)
2. Acuity Panel: 20" iMac ($2900)
3. Autorefractor: Topcon KR-8900 ($10,500)
4. NCT: Reichert AT550. I may decide not to get one, and stick with just GAT. ($2,500 used)
5. Lensmeter: Topcon CL-200 (still considering a manual lensmeter). ($3,000)
6. Retinal Camera: Canon CR-1 ($23,000)
7. Visual Field: Humphrey 750 or Octopus 3 series ($14,000)
8. Edger: National Optronics 7E Edger & tracer. If we decide to purchase one, it will be new. All the older OD's have cautioned me on purchasing a used model. This is a risky tactical move; however, my competition does not offer same day service, and second I also want to keep my cost of goods low, although for a startup you wont be busy enough for this to matter much. ($27,500)
9. EMR: OfficeMate ($2,200) They are running a deferred license fee promotion.
10. Anterior Segment Camera: Canon Point/Shoot camera + adapter + EyeFi card ($900)

Vendor Choices:

1. VSI a good source for used equipment
   
2. Lombart
   
3. Cal Coast
4. Universal Ophthalmic
   
5. There are more, so I will continue to add to the list
   

Blueprints

As promised, here is a rough sketch of our remodeled interior. We had to work within the confines of the existing structure. If you are looking for design ideas, contractors, or planners:

Eyedesigns Ask for Dave Pursel. They have great frame boards. They will design your floorplan and also sell optical cabinetry/furniture. Admittedly, expensive. Somewhere in the neighborhood of $60 square foot.
Magic Designs Speak with Cy Furman!
Fashion Optical Good ideas
Barbara Wright She is a planner/designer. I highly recommend her book, which I managed to read and take notes on while in OD school.

In the end, we ended up going with a local general contractor. We met him during a tradeshow (our annual state optometric convention) and had seen the work/projects he had done for several OD's we knew.

Look at SeeMyPractice for pictures of other doctors offices.

To do list

I've decided to create a basic laundry list of what we'll need to do over the next 11 months to get this show on the road, I'll add more as I go along:

1. Decide which equipment to purchase and vendors to use
   
2. Develop a marketing plan, so we can get in the black fast!!
   
3. Decide which frames to use in the optical. We are targeting roughly 600 frames
   
4. Create office forms

If you're reading this blog and wondering where you can "borrow" money from to start your practice. We asked for $330,000 and got it (remember: it never hurts to ask for more money. We likely wont use all of it and are trying to stay lean with our startup). Here are some options:

• http://www.matsco.com (0% down, based off your credit, and will usually need 2 years of experience). Read the fine print for a pre-payment penalty.
  
• A local bank. I went into a local bank and asked to speak to the Vice President of Commercial lending.. I introduced myself, had a business plan and tried to win him over. He was all for it! This is the way I went.
  
• A good introductory article
  

Oh, stay tuned for photos of the building and blueprints that we sent to the contractor!

WE OWN IT!!!

Woohoo!! I drove up July 15, 2009 to the title company's office and officially closed on our first building!! What a tremendous adrenaline rush it was. Seeing as how it was my first deal, I would say everything went pretty smoothly. The truism in commercial real estate is that you make your money when you buy the property for as cheap as possible & also at the closing table.

Deal Highlights:

• Total purchase price: $290,007.50 on our HUD settlement statement. $286,000 was the building price + $4007.50 for settlement charges. An HUD statement is a formal document which shows where money changes hands. I also received the appraisal report back from the bank shortly a week after the purchase, which valued the property at $295,000. Which means, I have built in equity right off the bat.
• Amount I was responsible for: $50,076.69
• Capitalization Rate: 8.03%
• Cash on Cash Return: 15.3%
  

I also made my first payment to the bank today ($1367 is the monthly note/payment, for the next 30 years). I also received my first rent check from our tenant that occupies the building for $5000.00.. they are set to leave at the end of October. So this rental income is an added bonus. The building however, will be vacant until our finish-out starts in March 2010.

Which brings me to the next subject: Buildout!!

• Our contractor has given us an estimate of the remodelling job. It was priced at $90,000 for a high quality finish out. I sent him blue prints of the property, they came and looked at it last month, and last week I also sent them pictures of my favorite offices/with comments that I would like to incorporate in our own.

In the meantime, after getting my feet wet with real estate, I purchased a few books on commercial/residential property investing because I've really enjoyed this experience. Things have been busy.